When the music stops – holding financial institution executives accountable for misconduct
Rita Oliveira, Ruth Walters and Raihan Zamil in this BIS note talk about accountability of banking executives. They choose regulatory framework in three countries- Australia, Singapore and UK:
The Nice Monetary Disaster and its aftermath uncovered a wave of banking scandals, triggering monetary instability and eroding public confidence in banks. Amid financial uncertainty, societal frustration mounted at regulators’ perceived incapability to carry executives accountable for failures inside their banks. In pursuing circumstances of misconduct, supervisory authorities discovered it troublesome to pinpoint the function of high-level executives as a result of they had been typically distant from the day-to-day actions the place the alleged wrongdoing occurred.
This paper critiques the evolution of regulatory frameworks that govern the accountability of banking executives and descriptions their implementation challenges. Some authorities have launched particular person accountability regimes that impose particular tasks on senior financial institution executives, whereas others depend on broader regulatory frameworks to pursue company wrongdoing. No matter approaches taken, all frameworks are finally reliant on sturdy supervision and enforcement.
A multi-faceted method, that we label the “accountability stack”, is required to get in “all of the cracks” that drive senior government behaviour. That stack consists of layers of seemingly disparate regulatory and supervisory devices that work together in such a fashion the place the entire could also be simpler in fostering particular person accountability than the sum of the components. Above all, the stack must be supported by the institutional will to behave.
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